2.9% economic growth projection achievable in spite IMF’s position – BMO

The Buhari Media Organisation (BMO) says the 2.9 per cent economic growth projection by the Federal Government for 2020 is achievable in spite of downward projection by the International Monetary Fund (IMF).

A statement signed by its Chairman, Niyi Akinsiju and Secretary Cassidy Madueke in Abuja, said the IMF projection would be proven wrong.

It disclosed that IMF position was arrived at after concluding its Article IV consultation with Nigeria.

The BMO said the IMF downward growth projection for Nigeria from its initial 2.5 per cent to 2.0 per cent was off the mark.

“They factored in obvious indicators that speak to weaknesses in terms of earnings, revenues and global trends fueled by the Coronavirus epidemic, which may indirectly affect Nigeria because of its impact on crude oil price that has hit economies around the globe.

“It is a known fact that before President Buhari took over in 2015, Nigeria was a mono-economy with its budget mainly based on the price of crude oil at the international market.

“Nigeria is in the process of active diversification. We have over the past four years commenced the process of looking inward and that is slowly but gradually taking our economy away from being foreign dependent.

“The IMF may have forgotten that Nigeria is diversifying its economy, thanks to Buhari’s foresight that it would be suicidal to rely entirely on revenue from oil to generate funds to bankroll the developmental programmes of government.

“This informed his decision to tow the path of economic diversification with focus on the development of agriculture, solid minerals, science and technology, manufacturing and Information Communication Technology (ICT).’’

The organisation said the Central Bank of Nigeria (CBN) which was the monetary policy authority of the nation had also been proactive in this new thinking.

It disclosed that the apex bank had raised Loan-to-Deposit Ratio (LDR) of banks from 60 to 65 per cent, principally to create more funds for credit to existing or new businesses.

The organisation noted that the CBN’s LDR had ensured that more than two trillion Naira credit was created over the past six months, while businesses were being funded and capacity to produce had increased leading to rise in job creation.

The BMO said that this would of course impact positively on the country’s GDP.

According to the organisation, the Finance Act is also changing the economic environment, either in terms of growing new small and medium scale enterprises through tax exemption for companies that have less than N25 million annual turnover.

“That is huge and it enhances investment for development.

“Nigeria has shown progress, and considering the current policies’ deployments by the Federal Government, our GDP growth rate would increase and also improve our GDP to population growth ratio.

“A number of legacy projects like Lagos-Ibadan expressway, Kashimbila Dam and hydro power project, Dadin Kowa dam are scheduled to be concluded and commissioned before the end of 2020. Lagos-Ibadan rail line will be operational by the beginning of the second quarter of this year.

“All these will also have multiplier effects on the economy. We are moving away from being a foreign dependent economy by domesticating the capacity of our own economy which is important for growth.’’